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There’s no denying that the Hormel diversification strategy is a brilliant play for its stockholders. The town in which I live – Willmar, Minnesota – is arguably the epicenter of the turkey industry in the United States. Jennie-O is the undisputed king of this one-horse company town.
What is easily lost in this article is the larger social impact to which meatpackers union president Richard Morgan alluded. As modern Americans shun meatpacking work as the dangerous, low-paying work that it is, Hormel addresses the issue by recruiting immigrants and refugees from Africa, Asia, and Latin America to take up the slack. Many say this is no different than previous waves of immigrants employed by earlier American manufacturers to fill labor needs, but it is indeed quite different.
Traditionally, US manufacturers provided a company store, company housing, company doctors, and company schools for their children of their workers. They accepted the full financial responsibility, the real, fully loaded cost of the labor necessary to do business. However, the new business model for the likes of Hormel is, the company pays the low wages, and taxpayers become the company store, company housing, company doctor, and company schools. Hormel has created a new class of working poor, and in so doing, creates not tax payers, but tax consumers. What’s more, when these newcomers assimilate and themselves acquire the raised expectations of modern Americans, they too want something better than meatpacking, so they and their children head in search of something better, and the process starts all over again. Local communities go through enormous societal upheavals and financial catastrophes – not once, but over and over again. Eventually, Hormel will likely diversify itself away from its low-tech core meatpacking business in search of higher value-added business, while small towns like Willmar and Austin are left behind, stunned, on top of the trash heap. Think Rust Belt.
This model is a perversion of the model that brought economic prosperity to developing nations like Japan, Korea, and China, where western manufacturers in search of cheap labor markets actually helped create middle class consumers in societies where none had existed before. Here in Middle America, however, Hormel turns the model on its head, destroying existing middle classes en masse, backfilling markets with cheap, unskilled, largely government subsidized labor pools in small towns that are already stressed by the challenge of adapting to the new economy. Our indigenous, middle-class families are broken up as young adults find no option but pursue opportunities and build families elsewhere. Small Midwest towns like Willmar and Austin lose the charm that once made them,, well, American, as they become backwater pools of yet more low-skilled, uneducated, high maintenance newcomers, from backgrounds that too often have no background in or appreciation of traditional American values, aspirations, and western democratic ideals.
In a country that arguably is the greatest human experiment in democracy and capitalism that mankind has ever produced, a destination for which countless newcomers have risked life and limb on flimsy rafts and in shipping containers, how in God’s name can Americans remain silent, for no greater purpose than maximizing shareholder value?
Bob Enos
Willmar, Minnesota